Cigarettes saw single digit growth in retail volume terms in 2021, with sales bouncing back strongly after the decline seen in the previous year. 2020 was a bad year for cigarettes sales with COVID-19 having a negative impact on demand.
The retail volume growth seen in cigarettes in 2021 was led by the dynamic performances of some of Turkey’s leading mid-priced and premium brands of cigarettes, with these taking share from some economy brands of cigarettes. Smokers of better-quality premium and mid-priced cigarettes did not generally give up their usual brands during the pandemic since they were better able to afford them.
As part of the COVID-19 measures taken by the government, tobacco specialists were forced to close in mid-2021, while grocery retailers were allowed to continue selling tobacco. This led to a decline in the distribution share held by tobacco specialists, with the channel losing share to, in particular, discounters, supermarkets and newsagent-tobacconists/kiosks in 2021.
In January 2022, the excise tax (OTV) for all tobacco products went up by 47.4%, with a further increase in excise taxes expected to be seen around July 2022.
Over the forecast period, cigarettes is expected to increasingly become a product that can largely only be afforded by higher income consumers, with low-mid and low-income smokers being forced to switch to fine cut tobacco products. As a result, the shares of premium brands are expected to continue growing, with these generally being the preferred choice of more affluent consumers in Turkey.
In 2022, a ban on the sale of tobacco products in chained grocery outlets with a selling space of less than 400sqm is expected to come into force, which could potentially shake up the distribution landscape. With smaller chained grocery retailers no longer able to sell tobacco this would likely lead to an increase in sales of cigarettes through tobacco specialists (Tekel stores) and independent small grocers, although larger supermarkets and discounters could also benefit.
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RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).See All of Our Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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